Collecting Money from a Debtor Who is Threatening to Declare Bankruptcy

[verovero]

My question involves bankruptcy in the state of: Fl

Someone I lent money to owes me a substantial debt via recorded judgment. But he has threatened to file for bankruptcy if I don't accept his untenable offer.

He owns, apart from his homesteaded property, 9 other investment R.E. properties in his name; has signed mortgages on these properties and his home for over 1.7 million in debt, and probably has a net worth of 800K to 2 million if the properties, other than his home, are sold.

He owes me less than half of that. There are no other judgments other than mine except a 4K tax revenue lien on her county records. The State of Florida Debtor name list does not show his name as a debtor on credit cards or other creditors, so the record looks pretty clean.

So...is it true that he cannot qualify for Chapter 13 since his secured debts are over 1 million?

If he does not qualify for Chapter 13, can he successfully go through Chapter 7? I think that, being cash poor, he can pass the means test, but I wonder if the abuse test could stop the bankruptcy.

I don't want to spend years in court fighting the bankruptcy.

At the end of the day, if he sells most, if not all of his RE investments (very little in the way of personal property), I would get fully paid and he would have money left over. That does not seem as if it fits bankruptcy parameters. Is this right?

[Mr. Knowitall]

What makes you think that somebody can have too much debt to qualify for bankruptcy?

If the judgment is as large as you suggest, why not hire a collections lawyer to collect the money for you?

[Geoffois]

I'm definitely no expert, but I think only the house he lives in is exempt up to a certain amount of equity, so I would think if he gets chapter 7 then he would be forced to sell the RE investments to pay the debt he owes which is to you the creditor. I don't think his investment property is exempt. Now if they are underwater then that is another story.

[KeyWestDan]

In Florida, only the home declared for the homestead exemption is exempt from execution. One car up to $5k I believe is exempt. There are some small exemptions for tools, furniture, etc. Nothing will exempt any equity he has in investment properties. Does he have a second car, a boat, etc. You can take it all now!

If you already have a judgment, you must IMMEDIATELY get an attorney that knows how to execute judgments and start executing it against any assets you can find, including all of his bank accounts, etc. Don't give him ANY time to play games or make arrangements. Don't be put off by a threat of bankruptcy, he can't get out of the judgment that easily and if he does file, a receiver will be appointed and you will be one of the first ones paid.

If you don't have an actual court judgment, you need to file a civil case immediately to collect your money.

Don't fall for any sob stories!